Healthcare Reform – how are you affected?

On March 23, 2010 President Obama signed the healthcare reform legislation into law. This new legislation is expected to help cover an additional 32 million Americans. How does this law affect you?

Changes That Will Take Effect in 2010
• Insurance companies cannot rescind coverage when a person gets sick

• Insurance companies cannot place lifetime benefit caps on coverage.

• Insurance companies cannot deny coverage to children with pre-existing conditions.

• Children may stay on their parent’s plan until age 26.

• Uninsured people will have immediate access to coverage through high-risk pools if they have been denied coverage due to a pre-existing condition.

• Small businesses will receive tax credits to help purchase health insurance for their employees.

• Medicare beneficiaries will receive a $250 rebate when they hit the “doughnut hole.”

• Medicaid will be expanded to cover people with incomes up to 133% of the federal poverty limit.

Changes That Will Take Effect in 2011

• Medicare beneficiaries will receive a 50% discount on brand-name prescriptions while in the doughnut hole.

• Insurance companies will be required to spend at least 80% of their premiums on medical claims. The interest on the monies earned by the insurance companies is not affected.

Changes That Will Take Effect in 2013

• Social Security payroll taxes will be increase for individuals making more than $200,000 and families earning more than $250,000. Unearned income will also be subject to a 3.8% tax.

Changes That Will Take Effect in 2014

• Americans will be required to carry health insurance or pay a $695 penalty; qualifying families will be able receive subsidies to help pay for insurance. There are some exceptions to this mandate.

• Medicaid programs will be required to include childless adults.

• Individuals and small companies will be able to purchase insurance through state exchanges. Illegal immigrants are barred from purchasing insurance from the exchanges.

• Small businesses with 50 or more employees must provide coverage to employees or pay a penalty.

• Insurance companies will be prohibited from denying coverage or charging more based on health status.

Changes That Will Take Effect in 2018

• Expensive employer based plans will be subject to a 40% excise tax. The thresholds are $10,200 for individuals and $27,500 for families.

Changes That Will Take Effect in 2020

• The Medicare prescription drug coverage gap will be eliminated; seniors will still be responsible for 25 percent of the cost of their medications until Medicare’s catastrophic coverage starts.

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